This weekend was a milestone weekend and I am glad I could witness it first hand. For the first time ever, a wristwatch broke the double digit USD million barrier.

Since 2000 (when apparently Aurel Bacs sold the first million dollar watch), we have seen watches sell over a million a few times a year. Sometimes it was even $4m or $5m. But when the 1518 steel Patek sold for more than $11m – it was a special moment.

I don’t think anyone had predicted such a strong result for this watch. This is HUGE news.  As this result (a new world record for any wristwatch) makes its way across the world’s news media – this will undoubtedly help all vintage wristwatches in terms of being a serious collectable asset class.

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Lets face it, wristwatches until now, have remained in the shadows of art and vintage cars.

The super rich did not seem to interested in buying a Paul Newman Daytona for $300k or a rare Patek 1518 for $ 7-800’000. Instead they would buy or ‘park’ their money in Picasso and Rothko or rare Warhols where $20-$50m are quite normal prices (just last night a Munch sold for $54m at Sotheby’s). If they preferred vintage cars, 1950s and 1960s Ferrari would be their first choice for dropping $10-20m quite easily. I read a statistic recently that over 70 cars traded for over $1m last year at public auctions (and a few more even in private treaty sales). In wristwatches you could count that number perhaps on one hand.

But when a Patek wristwatch (in steel despite its rarity) fetches a double digit million figure, collectors, family offices, financiers, celebrities and the super rich might just start paying attention to our humble little collectable category called wristwatches (even if I preferred they didn’t as it just means higher prices in the long run). Vintage watches is no longer the little boys category. It is in the big league now.

That sale of the 1518 in steel on Saturday night for $11m has broken new barriers for vintage wristwatches. We have entered into a whole new territory now (at least psychologically) and I am sure this will help vintage watches in the long run – for that I sincerely thank Aurel Bacs and his team at Phillipswatches. 

Let me share with you a few trends I saw this year at the auction aside from the record breaking result of the steel 1518 Patek Philippe:

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• Trophy, rare and unusual watches were strong: It did not matter what brand we are talking about- if the watches were rare or unusual and in good condition the results were very strong. In that respect both Paul Newman with retailer signatures did not disappoint – both achieving CHF 874k. An unusual and rare oversize Omega blew past estimates with CHF 72k (4x the high estimate)  as did a superb Patek 3974 retailed by Beyer (CHF 514k). Both the other 1518s did very well – especially the pink gold 1518 selling for a very strong CHF 1.47 (against a CHF 1.2m high estimate). A double-signed Patek 1463 steel also fetched a strong CHF 466k. The superb Rolex big crown tropical 6538 established a new record at CHF 562k (even if the market expected significantly more and the seller is sitting deeply in the red). A superb and rare Rolex tropical 6234/38 sold for CHF 305k (against an estimate of 50-80k). Lastly a superb and rare Rolex 2508 with multi-scale dial fetched a superb CHF 211k (against high estimate of CHF 100k). If the watch was rare and in good condition – buyers were there.

• Certain sports Rolex watches showed some weakness: One of my favourite categories, Rolex sportswatches showed some weakness. A superb 6200 Rolex submariner sold for CHF 271k including commission (a somewhat weak result). A killer Rolex GMT Master 6542 Gold with Bakelite (with almost red -brown dial) hammered at CHF 110k – also way below average (they should be hammering at CHF 150-200k). Normal Paul Newman Daytona continued to settle down in price – there were just too many made (so much for the Paul Newman hype – something I predicted would end sooner rather than later). Other hyper rare sports watches fared no better. A rare Rolex 6202 monometer fetched a disappointed CHF 25k and a rare Rolex Explorer 6350 with honeycomb dial only managed only CHF35k (I am guessing the lume was not original and admittedly I have seen better honeycomb dials- for more info on the Rolex 6350 Explorer – please see in-depth report here). No matter what excuses you come up with; vintage Rolex sports models were weak. A few big Rolex dealers must be feeling a little nervous right now. 

• You can lose money with superb watches: This should be a nice wake up call for all speculators of vintage watches. Three sellers must not be happy with the results – as they have all lost money with vintage watches this November. What is more astounding is that all three watches (all sold at Phillips) were blue chip reference, were in outstanding condition and belong to the holy grails of collectors. A double Swiss 6239 Rolex that was bought only three years ago at the Daytona one lesson, set a new record for the reference in this sale, but lost the seller money (he bought it in 2013 and paid CHF 269’000) but sold it including premium for CHF 310’000. Even if the seller paid Phillips zero commission he is in the red for a good CHF 10-20’000. Another blue chip Rolex model – the 6538 four liner fared no better. Here the owner is sitting on losses of CHF 40-60’000 – even if he is granted zero selling commission. This watch was also bought only three years ago. Last but not least a fine 2526 Patek which was bought by the owner in 2014 for CHF 87’500 yielded the owner only CHF 68’000 this time around (including buyers premium). I spoke to one collector who told me something very true: If you buy at auction and sell the watches too soon – the market will question why your selling and likely be sceptical (besides the fact that collectors don’t like watches that have been around the block). All three owners bought at auction and sold within a short time frame (three years). They all suffered financial losses during that time-frame. The moral of the story: If you try and flip your watches* at public auction too soon after buying them – your going to get punished.

• Predaytona showed strength as did many early multi scale Rolex models: I have been predicting this and saying this for some time now – Pre-daytona Rolex remained undervalued (especially relative to Paul Newman versions). They are finally showing some superb strength and are now surpassing Paul Newman (non screw down pushers) in price. Both 6238 models at Phillips sold for very strong numbers, a black dial 6238 sold for a nice CHF 150’000 which I think is a new world record for a steel 6238. The gold 6238 fared also very well selling for CHF 125’000 (all but surpassing normal Paul Newman Daytona at the Phillips auction). This is my view is just rational. Rarity should carry a premium and the market is finally beginning to understand this. Furthermore even earlier Rolex chronographs with multi scaled dials fared well. A dream 2508 Rolex with complex telemeter dial sold for CHF 125’000 (this was my favorite Rolex watch at the entire Phillips auction) and another dream Rolex chronograph the Ref 3335 (the largest pre war chronograph Rolex made at 38mm) with multi scale dial sold for a nice CHF 150’000. The 2508 Rolex at Christies fetched  a superb CHF 211’ooo (it was one of my picks and very desirable to due to olive pushers and first series case which is larger). There is no doubt: Square pusher Rolex chronographs are in style and in demand right now. They along with the 6234 and 6238 with their complex dials are the ‘new’ Paul Newman in my view.

• Weakness in time only Patek: What astounds me – is the weakness we see in wonderful time only models of Patek in the 1950s and 1960s. The pink gold Patek Serpico 2526 is just one example, others include the 3466 in white gold which did not sell not to mention the 3435 in platinum with diamonds which sold for an extremely conservative CHF 35’000. All these references have the wonderful movement 12-600 AM or the 27-460, complex cases and wonderful hand designed PP crowns. Perhaps due to their sometimes small size they remain overlooked by the market. I think it is a mistake and they will make a strong comeback once connoisseurs realize their exclusivity and divine movement with 18k gold rotor. Another great Patek time only piece ref 565 with Breguet numerals only fetched a fraction of what it should have (yes the case might have been polished) but it was a hyper rare watch and original watch.

• Asians showed up in full force: One thing I noticed this time around was that Asian collectors were strongly present. The Swiss watch industry might be facing declining sales in Asia for new luxury watches – but Asians were strongly present at the vintage watch auctions. I also noticed a younger buyer again (something I first noticed in May and wrote about here). This must be very healthy for the watch industry as a new generation type buyer enters.

• Dealers extremely active: I already noticed this in May but they stepped it up to another level. Dealers bought an incredible amount of lots, snapping up value deals. I think many lots fetched prices that were on the weak side and the dealers (rightfully so) took full advantage of this. I am guessing – but I think many of the lots bought by dealers will find its way to the American market as well as Asia.

*(not that all collectors who sell within a short time period flip their watches – sometimes you just have to sell for various important reasons that have nothing to do with speculating)

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Concluding remarks

The watch auctions mirrored exactly what is going on with other collectible markets, like art and classic cars. High quality continued to sell for strong prices while the average watches showed signs of weakness. I think all the collectable asset classes face the same problem going forward: finding quality is more and more difficult. We see it in cars. Vintage watches. Art is presumably no exception either. 

I do think the vintage watch market has held up better this year than the classic car market. Perhaps deservedly so. Maybe it is time for vintage watches to play catch up with classic cars. Is the price of $11m for a 1518 steel Patek really insane?

At first I thought the result was very strong but upon reflection it might make sense. Let me put it in perspective for you. There are only 4 steel Patek 1518 known. It is a chronograph perpetual calendar – the holy grail of Patek collecting. The price of $11m is equivalent to what in the classic car world buys you a superb Ferrari 250 SWB (only a normal steel example though – competition versions remain far more expensive). They made a total of 165 of those (90 normal steel versions and 75 competition versions). In terms of rarity and exclusivity the Patek wins hands down in my opinion and should be valued more. Now of course you cannot compare these two items one to one. A car satisfies different senses than a watch and despite there being many buyers of both vintage watches and cars at the end of the day – the end buyers are different.

Even if you take my analogy (which admittedly has the intellectual value of a high school drop out) of a Patek 1518 steel vs. Ferrari 250 SWB with a pinch of salt – there is still some validity in my argument. Don’t you think?

Lets see what 2017 has in store. 

(I have written much, now it is time to enjoy some pictures. Let me show you some watches that caught my eye).

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We start off with my perhaps favourite watch of the entire auction – a dream Rolex chronograph 2508 (main picture). Just look at this gilt dial. This example was as second generation version (unlike the first generation here with olive pushers and larger case). We asked the watchmaker to remove the plexi to get a better view of the dial.

What a dream watch – it gets my pick for the most beautiful chronograph in Geneva November 2016.

I love these square pusher early Rolex chronographs. They are far more sophisticated than any Paul Newman in my view. This is a connoisseurs Rolex watch.

This beautiful early Rolex chronograph 3335 also was stunning. The largest chronograph case of all Predaytona – this was my second favourite even though the gilt dial did not stand out as much as the 2508 second generation above.

Let us see how it looks on the wrist. Just superb.

Just because these early chronographs are so wonderful one last picture – together with a Daytona. A 6239 underline double swiss no less.

 

We move from Phillips to Christies to see what they had. I love their decoration and windows when you enter. Rolex sports models section? Yes please.

We move on to the cool big crown 6200 which sold at Christies for CHF 271’000 – a superb buy for the new owner. 

Let us take a closer look.

Ok the dial might have had a few spots (I actually like that – and it is quite normal due to the radium) and possibly have been treated (its seemed unusually glossy for a 6200 with radium lume) but this 6200 had this certain something, this patina that I found superb. For sure one of the best big crowns 6200 I have seen in a along time. 

The inside case back was correct with the octopus symbol and the watch had two service markings.

Movement was clean and nice – first time  I looked inside a 6200 big crown.

Even though I clearly prefer Pre-daytonas there is no question that a Paul Newman is a killer watch, especially the 6239 with steel bezel (I think the steel bezel allows the white dial to be more prominent and allows the beautiful black sub-dials to have their space – this is my favorite paul newman dial combination).

Below with the rare and early 300 tachymeter scale.

(For all those who encouraged me to buy a new shirt – I do announce that my old shirt – a Francesco Smalto bought in Paris three years ago and worn on a weekly basis has finally made its retirement. I will miss it. I now use it to polish my shoes, yes old shirt makes for great shoe polishing).

This star dialled Rolex 6062 oyster was a honest example. Yes the dial was not perfect but I actually liked the patina on this watch. It fetched only CHF 175’000.

When I go to auctions I also look at watches I may be less interested in. Like pocket watches and colorful stella day – dates just to learn.

Here is my tray full of goodies. That green dial Omani crown stella was a very cool watch.

Ofcourse I also took the liberty of looking at that Patek by Suzanne Rohr pocket watch that Christies was offering.

I was sitting next to an astute Asian collector of watches (but also pocket watches) who was educating me on the subject. The watch ended up fetching a nice price of CHF 307’000 blowing past the estimate of CHF 100-200’000.

I also had to try on that superb gold Omani dial Nautilus just for the heck of it.

For some reason it was the only watch that did not end of up selling. On that note I will study the Nautilus and thank Christies for providing me with Mstanga’s incredible Nautilus guide. That was very much appreciated.

It was time for lunch. Yes I do like the Hotel de Bergues but for CHF 55 for a plate of simple pasta – it better be good. It actually was. Food is excellent.

When I talk about two different generations of watch collecting – here is a perfect example. Both extremely astute collectors. Dr C and Mr A.

Lets get back to watches.  

Mr. A showed me this dream Universal watch he was wearing. I am starting to appreciate Universal more and thankfully collectors like Mr. A can teach me.

I mentioned the weakness in time only Pateks in my analysis above.

Here is another example of what I mean. A superb ref Patek 565 that should have fetched more. It was a very nice example with Breguet numerals and luminous dial all confirmed by the extract of archives. I really liked this watch. Maybe it is the long signature that attracts me – which correct for a watch dated 1945.

We move on to Sothebys which had this very nice (with a superb case) Patek 3448 early bead dial which will be sold in NY. The dial has been professionally restored and cleaned according to a professional expert at Sotheby’s. The conservative estimate of USD 80 -120′ 000 does reflect that.

The preview was over. I saw everything I needed to see. Now it was auction time. Before I enter the auction room – I get invited to the room of Mr John Goldberger to see him at work.

I was now ready for the auctions and did my homework properly (see here for my recommendations and strategies how to win at auctions).

I look forward to 2017 and am grateful for what 2016 has given me. 

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